When it comes to espresso bars, people in the specialty coffee industry often look upon the Los Angeles area as a microcosm of what is happening (and as a barometer of what will happen) throughout the rest of the country. And while the larger chains such as Starbucks and Diedrich continue to compete for new locations and greater market share throughout the city and its surrounding environs, a number of smaller, independent coffee bars with only one or two stores have carved out their own niche - and one such example is Urth Caffé.

An Adventure in Coffee

Urth Caffé’s retail store on Melrose Avenue in West Hollywood is, you could say, somewhat of a Hollywood success story. Since openning in 1995, it has been embraced by films stars such as Cameron Diaz, Anthony Hopkins, and Sean Connery (all of whom can be seen waiting in line for a latté whenever their personal assistants aren’t handy), and the store has appeared in LA Magazine, In Style, and Vanity Fair, in which it was mentioned as one to the top spots in Los Angeles where Hollywood moguls meet. But beneath all of the Hollywood glitz and glamour, Urth Caffé had its own humble beginnings.

Company owners Shallom and Jilla Berkman started their business in 1989 as a mail-order company selling natural and organic products for the home. Their goal was to create a business that contributed to the health of the consumer and to the health of the planet. During their first year in business, while attending conventions such as the Eco Expo and the Whole Life Expo, Shallom and Jilla learned of an organic coffee project in Peru. They decided to purchase some of this coffee and to offer it alongside their other products whenever they attended a convention. In a short time, the coffee became their best selling item.

From that point on, the Berkmans dedicated themselves to coffee. They learned everything they could - from whomever they could - about importing, roasting, and blending and within two years, they had established a list of standards by which they would run their specialty coffee company (see side bar). In 1991 they also opened up a retail location in Manhattan Beach in southern Los Angeles, which in essence turned out to a tiny, 10’ by 10’ space, barely big enough to fit one pour over coffee maker, a single Bravo one-group semiautomatic espresso machine, a few jars of biscotti, and a couple of customers.

But the Berkmans were in business, and over the next four years, their location developed a loyal following: on any given day, a long line of local surfers, office workers and residents from neighboring communities would inevitably form and would wind its way outside the store, onto the sidewalk, and around the building. And this loyal following eventually grew to include a number of wholesale accounts. Commenting on the company‘s strategy to attract wholesale accounts, Shallom Berkman says, “We use our retail location to educate our customers about our philosophy and about our coffee. We tell them that if they want organic coffee and would like this philosophy to grow in other places [other restaurants and cafés], they should tell the proprietors that they want organic, sustainable, ethical coffee. And we also remind customers that we sell coffee wholesale, so if they want to see Urth Caffé in other places, they should let the proprietors know.”

By using the above method, and by further educating customers via the company’s website, the company developed a strong wholesale business selling bulk coffees and tea (which it later included in its line of offerings) to wholesale accounts such as Babula (in Santa Monica), Hollywood Moguls (in Hollywood), and Hungry Mind (in Manhattan Beach); and, since the company moved to its Melrose location back in 1995, the list has grown to include a number of movie studios. (Moral of the story: Never underestimate word-of-mouth marketing.)

Urth Caffé’s Melrose store today sees over 3,000 customers a day and it’s a far cry from the 10’ by 10’ space in Manhattan Beach. The Bravo one-group espresso machine has been replaced by a Bravo three-group semi-automatic espresso machine; two Curtis D-500 Airpot Brewers have replaced the single pot pour over; and multiple glass jars brimming with biscotti, madeleines, and chocolate covered espresso beans fill the counter. At the rear of the store, there are numerous shelves lined with urns of coffee and tea, French press coffee pots, cups and saucers, tea pots from China, Japan, and England, and a number of other accouterments that appeal to the hands-on consumer of coffee or tea. Seating for up to 30 awaits customers inside the store and for up to 50 more awaits customers on the outside patio. By 10:00 am, all of the seats will be filled. It’s now 7:30am and Shallom still has some time to breath before the Sunday morning rush sets in.

Shallom attributes the increase in customer flow in part to the company’s decision to carry specialty foodservice products. “Having the highest quality desserts in a coffee bar is an incredible vehicle for attracting people who enjoy coffee and tea,” he says. In an effort to increase its market share in the late 90s, when Los Angeles was quickly getting saturated with coffee companies like Starbucks, The Coffee Beanery, and Peets, Urth Caffé started offering gourmet food with the same philosophy of being organic, pure, and natural. The company began baking its own line of pies, cakes, and cheesecakes from scratch and kept adding different items onto its menu to see how they worked. Today, the company is selling 1,600 slices of desserts a week (that’s 160 cakes) and many of the company’s baked products, such as its tiramisu and coffee-flavored cheesecake, use Urth Caffé coffee or espresso as a key ingredient.

One other interesting thing to note about Urth Caffé is that it had to overcome a common mystique (or dogma, depending upon who you talk to), that in order for a specialty coffee company to be successful, it has to roast its own coffee using its own roaster. With the exception of its first few years in business, Urth Caffé has always bought its own coffee from farms like Finca Irlanda in Chiapas, Mexico and has contracted out all of its roasting. Shallom notes that on a wholesale level, the company’s prices are, and always have been, quite a bit higher than its competitors, and that this has had something to do with roasting off site, which makes it more expensive. But he also notes that Urth Caffé has not had to keep its prices competitive with the larger chains: “We have always tried to bully our way into the market by developing a strong customer loyalty with our product and by creating a situation in Los Angeles in which customers demand Urth Caffé coffee, so that when a wholesale customer comes to the company, they really want that brand recognition in their store and they’re willing to pay more for it.”

Urth Caffé plans to open up five more stores throughout the Los Angeles area (the first of which is already under way in Santa Monica) and to supply these stores with baked goods and its full line of blended teas from its central commissary in Culver City. So while the larger chains fight for number two to Starbucks, there still seems to be plenty of room for smaller independents who can create their own niche and who can develop their own loyal following. As Shallom and I say good-bye, a line begins to form near the register, led by a sharply dressed lady carrying a Prada handbag and a pug dog. The lady sets the pug down and orders a cappuccino. The pug, in turn, stares longingly at a display of freshly baked muffins. The lady waits patiently, the pug waits patiently, and from behind the espresso machine appears a smiling barrista holding a cappuccino with a heart inscribed in its froth. Thankful, the lady takes her cappuccino and walks out onto the patio; still hopeful, the pug follows.